KARACHI: Investors of Pakistan stocks may remain cautious over the ongoing socio-economic situation in the country.
Analysts at Arif Habib Limited said that following the disbursement of tranche by the IMF, government is expected to unlock further foreign economic assistance from various international creditors in addition to flood relief aid from friendly countries and other financial institutions.
READ MORE: Pakistan stocks shed 151 points in range bound trading
However, investor will remain cautious given the current overall socio-economic situation of the country. Albeit, the analysts expect the market to be range bound in the upcoming week.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 4.2x (2023) compared to Asia Pacific regional average of 12.5x while offering a dividend yield of 9.6 per cent versus 2.7 per cent offered by the region.
In the outgoing week, the market remained jittery and showed a mixed trend. It commenced on a negative note amid concerns over the flood crisis and its overall impact on the economy.
READ MORE: Pakistan stocks end in green as SBP gets IMF tranche
However, the market soon recovered following the approval and subsequent disbursement of USD 1.17bn tranche from the IMF to Pakistan. As a result, Pak Rupee strengthened against the greenback, closing the week at PKR 218.98, up by PKR 1.68|0.8 per cent WoW.
The bullish trend was short-lived as the announcement of inflation number for the month of Aug’22 (a 47-year high), changed the overall sentiment of the market.
In addition, trade numbers released during the week too dampened the overall sentiment as it posted a 29 per cent MoM jump in August 2022. The market closed at 42,309 points, shedding 282 points (down by 0.7 per cent) WoW.
READ MORE: Stocks end up 156 points amid political noise
Sector-wise negative contributions came from i) Banks (118 points), ii) E&P (90 points), iii) Automobile Assembler (61 points), iv) Miscellaneous (40 points) and v) Textile Composite (31 points). Whereas, sectors which contributed positively were i) Cement (110 points), and ii) Leather & Tanneries (25 points).
Scrip-wise negative contributors were HBL (73 points), TRG (47 points), PSEL (41 points), ENGRO (39 points) and POL (36 points). Meanwhile, scrip-wise positive contribution came from SYS (76 points), EFERT (48 points), KOHC (32 points), FABL (31 points) and SRVI (25 points).
READ MORE: Pakistan stocks plunge despite IMF program revival
Foreigners selling continued this week, clocking in at USD 0.74 million compared to a net sell of USD 1.87 million last week. Major selling was witnessed in Commercial Banks (USD 1.8 million) and Power (USD 0.8 million).
On the local front, buying was reported by Banks/DFIs (USD 3.0 million) followed by Individuals (USD 2.4 million). Average volumes clocked in at 211 million shares (down by 15 per cent WoW) while average value traded settled at USD 31 million (down by 15 per cent WoW).
